Tech Stocks Slide as AI Concerns and Oil Surge Weigh on Markets – Europe Market Wrap
A selloff in South Korean chipmakers weighed on global technology stocks, while oil prices and bond yields climbed after a fresh round of strikes in the Middle East over the weekend.
Concerns that the artificial intelligence rally has become overstretched sent SK Hynix and Samsung Electronics sharply lower in Seoul. Nasdaq 100 futures fell 1% as semiconductor stocks, including Micron Technology, declined in premarket trading. S&P 500 futures slipped 0.3%.
South Korea has become an increasingly important barometer for the AI trade following the Kospi’s chip-led outperformance this year. That rally has turned more volatile in recent weeks as investors question whether heavy spending by AI hyperscalers will generate returns strong enough to justify continued investment.
Traders also pointed to the possibility of investors rotating into SK Hynix’s newly listed American depositary receipts, which surged during their trading debut on Friday. The ADRs fell 8.2% in early trading on Monday.
Renewed violence in the Middle East also weighed on sentiment as the US and Iran exchanged strikes through Monday while issuing conflicting statements over whether the Strait of Hormuz remained open. The escalation briefly pushed Brent crude up as much as 5% before it pared gains to trade about 3.3% higher near $78.50 a barrel.
Government bonds in Europe and Asia came under the greatest pressure, with the two-year UK gilt yield rising seven basis points to 4.28%. Treasuries recovered some of their earlier losses. The dollar was little changed, while gold and Bitcoin declined.
